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Long-Run Productivity Shifts and Cyclical Fluctuations

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  • Silvia Sgherri

Abstract

Using unobserved stochastic components and Kalman filter techniques, the paper assesses the relative importance of transitory and permanent shifts in Italian real GDP within a production function framework. Evidence suggests that the increase in hours worked that has accompanied pension and labor market reforms accounts for the bulk of low-frequency variation in growth, but points to factor utilization as the main driver of business cycle fluctuations. In contrast with the predictions of standard Real Business Cycle models, a positive shock to the underlying rate of total factor productivity growth generates a slight decline in hours, whereas the response of output to the same shock is found to be positive.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 05/228.

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Length: 37
Date of creation: 01 Dec 2005
Date of revision:
Handle: RePEc:imf:imfwpa:05/228

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Keywords: Economic models; business cycle; employment; unemployment; growth accounting; business cycle fluctuations; unemployment rate; nairu; gdp growth; labor participation; business cycles; growth rate; real gdp; real business cycle; employment growth; total factor productivity; growth rates; rate of unemployment; employment rates; employment indicators; private employment; employment rate; gdp growth rate; female labor force; employment fluctuations; real business cycles; male labor force; private employment agencies; labor force participation; self employment; economic growth; labor force population; total employment; aggregate employment; employment agencies; source of business cycles;

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References

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Citations

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Cited by:
  1. Calcagnini, Giorgio & Travaglini, Giuseppe, 2014. "A time series analysis of labor productivity. Italy versus the European countries and the U.S," Economic Modelling, Elsevier, vol. 36(C), pages 622-628.
  2. Bogdan Lissovolik, 2008. "Trends in Italy’s Nonprice Competitiveness," IMF Working Papers 08/124, International Monetary Fund.
  3. Tatiana Cesaroni & Carmine Pappalardo, 2008. "Long run and short run dynamics in italian manufacturing labour productivity," Economics Bulletin, AccessEcon, vol. 3(15), pages 1-11.

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